INDUSTRY

COMPANY

PUBLIC OFFICIALS of the YEAR

Natwar Gandhi
2007 HONOREE

Chief Financial Officer, Washington, D.C.

Natwar Gandhi knows how to make red ink turn to black. This spring, he was approached by Amtrak, which hoped to lure him to erase an enormous deficit as he had already done as chief financial officer for Washington, D.C. City officials did everything they could think of to keep Gandhi in his current position, including boosting his salary by nearly $100,000. And this money maestro, who arrived in America from India 40 years ago with $7 in his pocket, chose to stay put.

What makes Gandhi worth such big bucks is the fact that he has come to embody fiscal rectititude in Washington, a city that a dozen years ago faced a $518 million deficit and came close to bankruptcy. "He is really an indispensable person for the District," says Mark Plotkin, a local radio commentator. "He has maintained fiscal integrity, and that wasn't the case for the District before."

Gandhi, who is 67, has helped craft 10 balanced budgets in a row, keeping spending in check while institutionalizing financial measures that have laid a firm foundation for the city. Along the way, he has had to resist near-constant political pressure to present rosier revenue forecasts that would make life easier for the city's elected officials — forecasts that were themselves made possible by Gandhi's own rebuilding of the city's revenue-projection team.

"There was always some grousing by members of the council that Nat was too cautious," says former Deputy Mayor John Koskinen. But even as some elected officials have occasionally been wont to criticize him — or shout at him — they have proven willing to follow his lead, making tough decisions to keep the city's fiscal house in order, including the 2001 closure of D.C. General Hospital

It's never fun being the person who has to say "no." But Gandhi himself recognizes that his job has been made easier by the fact that the city's political class learned the hard way about the long-term importance of sound finances. "It has remained in the psyche of our leaders here that we never want to go back to those days," he says, "when we lost our limited democracy."

Those days were the mid- to late-1990s, when deficits were the result not only of overspending but of clearly cooked books. Vendors were not being paid, the city was borrowing money to pay short-term operating costs and its bonds were at junk status. In 1997, Congress passed a law that created a fiscal control board to oversee the city, wiping out home rule.

Gandhi joined the control-board staff, initially working to revamp Washington's chronically dysfunctional tax collection department. He took over as CFO in 2000. Prior to his work with the District, Gandhi had a long career at the federal Government Accountability Office, where he had the job of auditing the IRS.

His work as CFO largely has been about maintaining slow and steady discipline, but he recalls with pride the day city officials were able to announce Washington's fourth straight balanced budget. That had the effect of sending the control board into dormancy and reverting power back to the District. A remnant of the control-board law, however, has left Gandhi with unusual independence. The CFO is appointed by the mayor, but in essence can't be fired during his five-year term.

In fact, Adrian Fenty, Washington's new mayor, made a point of announcing that he would reappoint Gandhi even before he won last year's general election — and didn't hesitate to give Gandhi a salary far higher than his own. "No one epitomizes the strong fiscal recovery more than Nat Gandhi," Fenty said.

Under Gandhi's watch, deficit spending is not allowed by any agency in the District. Anything and everything that moves money in Washington has to be cleared by his office, including budgets and even the lottery. The bottom line is a surplus of $1.4 billion and a healthy bond rating — crucial in a city that borrows heavily to pay for major projects such as a new baseball stadium and a $2.3 billion school modernization program.

Gandhi, who is pushing to impose a much lower borrowing cap, claims not to "have a political bone in my body." Yet he's proven to be an effective diplomat, keeping happy various constituencies within the District government, Congress and Wall Street, even while constantly warning city officials away from spending more money than they're able to take in.

"He's been through a cauldron that most people haven't been in," says Koskinen, "and done better than most people could have."

— Alan GreenblattPhoto by Steve Barrett

Every year since 1994, GOVERNING has honored individual state and local government officials for outstanding accomplishment by naming them Public Officials of the Year. Elected, appointed and career officials from any branch of state or local government are eligible. Our readers are invited to nominate individuals who have had a notable positive impact on their department or agency, community or state.

GOVERNING annually receives several hundred nominations from individuals in the public and private sectors. In addition, GOVERNING staff consults experts and scholars in the field, and also nominates outstanding individuals they encounter in the course of their work. Nominations are evaluated by a selection committee, which, after painstaking research, chooses the winners.